Tags: EU | Budget | Rules

EU Nears Agreement on Tougher Budget Rules, Parliament Says

Wednesday, 07 Sep 2011 02:04 PM

Euro-area budget-deficit rules are set to be toughened under a tentative compromise by national representatives and the European Parliament, lawmakers said.

The deal would make it easier to impose sanctions on countries that let their budgets slip, even before the deficit tops the euro-area limit of 3 percent of gross domestic product.

“We are not completely out of the tunnel yet but the end is in sight,” Guy Verhofstadt, head of the Liberals in the parliament, said in an e-mailed statement in Brussels today.

The penalties are the keynote of a six-part legislative package that includes closer monitoring of national economic competitiveness as the European Union draws lessons from the debt crisis.

France had been the last holdout against the parliament’s push for automatic “preventive” sanctions before deficits go over the legal limit.

Details still being fought over include the parliament’s call for surveillance of countries like Germany with trade surpluses.

Negotiators from the parliament and national governments will meet again in Strasbourg, France next week to try to make further progress.

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